In the coming months, I will begin my 30th year
as an executive search consultant, during which time I have
conducted hundreds of searches for CEO's, CFO's, Chief Marketing
Officers and many others. I hope you will permit me a little look
over my shoulder to build some perspective for my remarks today. In
the time that I have been active in the business world, we have seen
much change. The playing field has globalized and we have seen raw
materials and capital costs retreat to secondary leverage positions
as differential human resource costs have driven manufacturing to
parts of the world unknown to most business executives as of 1970.
Technologically we have moved from card-readers to the Blackberry.
And during all these changes, the Chief
Financial Officer has evolved through a series of specialist phases,
beginning with general accountancy; then to tax guru during the
leveraged leasing phase; then to systems designer as computing power
escalated; then to merger and acquisition manager as the
conglomerates were built; then to cost accountant supreme when the
accounting focus turned inside to management reporting; and now is a
global risk manager.
WHAT DO CEO'S WANT?
Against this background of considerable change,
we need to ask the question, What is it that Chief Executives want?
Admittedly, some still want specialists, but most want a business
partner able to forecast and analyze the entire business landscape.
One of the truly brilliant CEO's with whom I
have had the pleasure to work is Rolf Huppi, Chairman of Zurich
Worldwide. As he and I collaborated to totally rebuild the senior
executive corps of their U.S. operations some years ago, he
introduced me to the concept of the conversation partner. In this
scheme, everybody throughout the hierarchy is required to be a
conversation partner for the person at the next higher
organizational level. The inference was that every key subordinate
would have the intellectual breadth and personal confidence to
discuss any business issue - present or future - which might be
important to the growth and profitability of the company.
Conversations were held as equals with the understanding that, when
consensus could not be achieved, there was still the chain of
It takes only a little reflection to understand
- if implemented successfully - the intellectual capital throughout
the organization can be extraordinary under this paradigm.
DO CEO'S NEED A PARTNER?
Why do Chief Executives - most of whom seem to
have considerable ego strength - feel a need for a partner? There
are several real reasons. First, no one person has all the
answers. Second, it is smart to pilot test an answer before the
rollout, even if he or she has made the decision unilaterally. Most
importantly, it can get lonely there in the CEO's office. The tough
decisions all rise to the top, and the CEO is the only person to
feel the full impact of outside forces on a really personal basis -
issues such as Boardroom tensions, national and local political
impacts on the business and so forth. Plus, there are internal
frictions and political factions to confound decision-making.
It becomes clear that a CEO needs a
conversation partner, someone he or she can speak with openly and
explore alternatives without fear of political repercussion. And if
no one on the inside steps up to fill the role, the general
management consultants will move in. Senior partner friends of mine
at major strategy firms tell me that many of their engagements are
the result of this conversation partnering role that they play with
their clients. They sell millions of dollars of consulting just
because the CEO needs someone to talk to openly!
WHY PARTNER WITH THE CFO?
The Chief Financial Officer is in an excellent
position to become the primary confidant of his or her CEO for a
number of reasons. First, numbers tend to neutralize emotions and,
because the CFO naturally has an overlapping referee role with the
CEO in making asset allocation decisions, there is less apt to be
political tension with the CFO than there would be between the CEO
and a division executive or a senior sales executive, for example.
In addition, a newly appointed CEO often makes the Chief Financial
Officer one of his first team changes - and being first creates a
natural alliance - two "outsiders" learning the terrain together,
creating a somewhat natural opportunity for partnering.
WHAT ARE THE CRITICAL FACTORS?
There are four elements that seem to be of
critical importance in productive partnering. They are a shared
vision of the enterprise, role clarity, value added contributions
and a bond of trust. With regard to shared vision, one must be
working toward common goals to release the synergy necessary for
partnering. If you cannot find common ground here with your CEO,
send me your resume now because you will not thrive in that specific
You need to find out what the CEO expects from
you. If you do not know, ask! Lobby for a broadened role if you
are unhappy with the definition and understand that mismatched
expectations can only lead to a weakened team effort. Technical
mastery will get you accepted as a key subordinate, but no more than
that. The stuff of partnership is playing a role in shaping the
business and to truly be adding value, you must be participating at
The three components already highlighted are
necessary but not sufficient for a true partnership. There also
must be a bond of trust, which may be granted by the CEO as an act
of faith, or, it may evolve over time through exposure and
incremental acceptance. Alternatively, it may be a cathartic
experience when you are thrown into difficult decision making during
an IPO, a takeover battle, or a merger integration.
HOW DO YOU PARTNER EFFECTIVELY?
Over the years I have watched some financial
officers establish strong partner relationships with their CEO's and
others fail. What is it that the successful ones do? First, they
get intimate with the business. They do not confine themselves to
the numbers - they get out, travel in the field and meet customers.
They lunch with their peers and other key managers, not just with
the finance staff. They ask for special project leadership roles.
The result: they have more meaningful business dialogues with their
Second, the ones who get ahead are brave and
take some risks. They speak their mind yet stay open to alternative
concepts and solutions. They ask tough questions and they are
proactive in interacting with their peers and their boss. The
result: people, including the CEO, understand they are passionate
about the business in which they are participating.
Third, successful CFO's stay broad in their
outlook. They take the risk management view first, last and always,
scanning every key aspect of the business routinely. They
specifically concentrate on where the action is not - because that
is normally where the next problem is brewing. The result: they are
meshing with the CEO's thought process by focusing on future
outcomes and maintaining a macro-viewpoint while, at the same time,
protecting him or her from developing blind spots.
Fourth, the CFO's with whom presidents want to
partner are futurists in their own realm. They push for better
metrics to guide the management decision-making. Some are
developing human asset accounting systems to optimize today's profit
differential - the company's people. The result: they are now
regarded as thoughtful groundbreakers.
Finally - and this perhaps proves that I am
really speaking to you as a recruiter - the most effective CFO's
build world-class staffs. They hire people who are not only their
intellectual equals; they settle only for people who are broad in
their interests yet deeper in their specialty than they are. And,
no wallflowers! You need a productive debating society to unearth
the problems and solve them creatively. If you can accomplish this
task, you will get these results: better technical problem
solutions; more teamwork; and, most importantly, the time to truly
partner with your CEO in the way Mr. Huppi so brilliantly devised.